Oil prices up in Asian trade, buy­ing re­strained

The China Post - - MARKETS -

Oil prices rose in Asia Fri­day, re­cov­er­ing from a steep dive but buy­ing sen­ti­ment re­mains shack­led by a global sup­ply glut, an­a­lysts said.

U.S. bench­mark West Texas In­ter­me­di­ate reversed an ear­lier decline to ad­vance two cents to US$50.81 and Brent gained 20 cents to US$56.85 in af­ter­noon trade.

A rise in Ger­man industrial pro­duc­tion num­bers and signs of a po­ten­tial de­mand pick-up are pro­vid­ing some sup­port, while top oil pro­ducer Saudi Ara­bia has raised pric­ing for its crude ship­ments to Asia, the king­dom’s big­gest mar­ket, in a sign of in­creased de­mand.

How­ever, a global sup­ply glut re­mains a damp­ener for any rally.

WTI and Brent sank 3.6 per­cent on Wed­nes­day af­ter the U.S. Depart­ment of En­ergy said com­mer­cial in­ven­to­ries in the world’s big­gest econ­omy rose nearly 11 mil­lion bar­rels to a fresh record of 482.4 mil­lion in the week end­ing April 3.

That came af­ter Saudi Ara­bia’s Oil Min­is­ter Ali al-Naimi said the coun­try’s pro­duc­tion hit an all-time high of 10.3 mil­lion bar­rels a day in March.

The fig­ure was up 450,000 from Fe­bru­ary and topped the pre­vi­ous peak set in 1980, and Naimi said he ex­pected out­put to con­tinue at around 10 mil­lion a day.

Alas­tair New­ton, an an­a­lyst with No­mura Se­cu­ri­ties, said the down­ward pres­sure on prices will likely persist at least for the rest of this year.

“Saudi Ara­bia’s de­ter­mi­na­tion to pro­tect its mar­ket share, the key driver, shows no sign of eas­ing de­spite the fis­cal con­se­quences for the king­dom,” he said in a re­port on Thurs­day.

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